USD/MXN PRICE FORECAST: US DOLLAR TO MEXICAN PESO BREAKOUT GOES VERTICALUSD/MXN eclipsed the 25.000 worth because the Mexican Pes
USD/MXN PRICE FORECAST: US DOLLAR TO MEXICAN PESO BREAKOUT GOES VERTICAL
- USD/MXN eclipsed the 25.000 worth because the Mexican Peso plunged additional towards the US Greenback after Banxico slashed benchmark rates of interest to match latest FOMC motion
- Spot USD/MXN is buying and selling at file excessive readings largely as a result of crude oil worth battle and coronavirus pandemic
- The US Greenback would possibly seem overextended versus the Mexican Peso, however USD/MXN may proceed urgent greater whereas recession threat looms
The US Greenback has recorded a staggering 30% surge towards the Mexican Peso since USD/MXN bottomed out mid-February across the 18.500 worth. Spot USD/MXN now trades properly above the 25.000 deal with because the Mexican Peso, a prime rising market foreign money, crumbles because the US Greenback, a well-liked safe-haven foreign money, skyrockets.
Recommended by Rich Dvorak
Check out our latest Top Trading Opportunities
USD/MXN PIERCES 25.000 PRICE AS MEXICAN PESO IMPLODES VS US DOLLAR
USD/MXN has staged a confounding rebound over the previous couple of weeks because the most liquid and closely traded EM FX pair notched a 16-month low in early February. In truth, USD/MXN is at the moment buying and selling at its highest studying on file.
Recommended by Rich Dvorak
Discover the basics of forex trading
The monumental rise in USD/MXN may appear a bit overextended, nevertheless, contemplating spot costs are urgent technical resistance introduced by the 3-standard deviation Bollinger Band higher barrier. Additionally, USD/MXN would possibly gravitate again decrease round technical confluence underscored by the 161.8% Fibonacci extension of the January 2017 to July 2017 bearish leg.
USD/MXN PRICE SURGE FOLLOWS PLUNGE IN CRUDE OIL & RISE IN RECESSION RISK AMID CORONAVIRUS PANDEMIC
Chart created by @RichDvorakFX with TradingView
That mentioned, elementary drivers just like the crude oil worth battle and rise in recession threat may proceed fueling the parabolic climb in USD/MXN. The Mexican Peso, which is intently tied to the value of oil, has crumbled because the collapse in crude oil pressures Pemex – Mexico’s state-owned oil firm.
Recommended by Rich Dvorak
Learn how to analyze and react to market news in real-time
On the identical time, extraordinarily excessive readings of FX volatility have largely bolstered the US Greenback as coronavirus issues plague market sentiment.
USD/MXN PRICE CHART: 4-HOUR TIME FRAME (FEBRUARY 27 TO MARCH 23, 2020)
As such, USD/MXN has potential to maintain churning greater inside its upward-sloping bullish channel prolonged by way of the continuing sequence of upper highs and better lows. Additionally, the 9-period and 34-period exponential transferring averages on the 4-hour USD/MXN worth chart reveal the short-term and medium-term uptrend, which may proceed supporting the US Greenback relative to the Mexican Peso.
— Written by Wealthy Dvorak, Junior Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception